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Zara Marketing Management

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Zara Marketing Management
Company background and relevant financial information
The Inditex (Industria de Diseño Textil) is a clothing manufacturer group founded in Spain in 1985 by Amancio Ortega Gaona. This group is owner of Zara and from the 1990s launched other firms such as Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Zara Kids, and Uterqüe (see Table 1 in Appendix Section). With this wide brand selection, Inditex is actually able to satisfy women, men, and children needs in an international context.
In fact, Inditex group, through the years, expanded to 6,104 stores in 86 countries spreading over Africa, Asia, Europe and America, and it has become one of the biggest fashion retailers in the world, operating in textile,design, manufacturing and distribution (Inditex, 2013).
Even though the group has an international vocation, it has its head-quarter in the north-Western of Spain. Most of the corporate managers are Spanish, and roughly the 50% of the manufacturing is located in Spain or very close to it, as the factories in Portugal, and Morocco (Zara: Fast Fashion, Pankaj Ghemawat, José Luis Nueno). These mentioned evidences are useful to underline that the Spanish head-quarter exerts a strong influence on Inditex's world wide business model, and all the related global marketing strategies.
The financial year 2012, Inditex was continued to show a really strong financial position. As the line chart 1 showed, at the year end of 2012, the net sales were 15,946 million euro and the net income was 2,361 million euro. Inditex was characterised by strong expansion by opening 482 new stores and launched online sales in Poland and China.
Line chart 1
(Source: Inditex annual report,2008-2012)
Resources available to the company for coming years
The Inditex Group has seen in 2001-2011 period a continued growth that process is not going to be arrested in the following years (see Table 2). By 2016, Inditex sales may reach 21,103 M € from 13 793 M € of 2012.
According to Research and Market report in 2011, the global apparel and accessories retail industry will be growth during 2012-2017 and the reach around US $1,369 billion in 2017 (Research and Market, 2011). The next strategies for Inditex in the nearly future are directly connected with the global growth opportunities. Until 2012, only Japan and China were doing online sales in Asia because Inditex wants to launch and promote new stores in these countries. It will be a good chance for them to improve the e-commerce sector not only in Asian market.
As shown by above-mentioned sources, Inditex's financial bases are stable enough to allow the group to plan activities and strategies that can sensibly answer to all the challenges offered by globalised world trade. Ones of the most relevant key points that globalisation presents could be a smart Corporate Social Responsability program, a conscious environmental policy and a concern about unfair and children labour practices (Zara: Staying Fast and Fresh, 2011).
Appendix
Table 1
Inditex Group Sales 2012 Concept

Sales in 2012

Stores

Countries

Zara

66.1%

1770

86

Pull & Bear

6.8%

825

60

Massimo Dutti

7.1%

634

61

Bershka

9.3%

910

64

Stradivarius

6.0%

816

53

Oysho

2.0%

533

37

Zara Home

2.2%

363

37

Uterqüe

0.5%

87

18 (Source: Inditex S.A., 2013)
Table 2
Inditex Prevision 2014-2016

Actuals in M €

Estimates in M €

Fiscal Period January

2011

2012

2013

2014

2015

2016

Sales

12 527

13 793

15 946

17 226

19 081

21 103

Operating income (EBITDA)

2 966

3 258

3 913

4 173

4 694

5 237

Operating profit (EBIT)

2 290

2 522

3 117

3 321

3 752

4 204

Pre-Tax Profit (EBT)

2 322

2 559

3 131

3 344

3 813

4 275

Net income

1 732

1 932

2 361

2 613

2 934

3 285

Dividend per Share ( €)

1,60

1,80

2,20

2,47

2,79

3,17

Yield

1,34%

1,50%

1,84%

2,07%

2,33%

2,65% (Source: 4 traders.com)
References
Inditex (2008-2012),Annual Report, Available at: link Inditex (2013),Our group,Available at: link Research and Market(2012),Global apparel and accessories retail industry. Ireland. Zara: Staying Fast and Retail, Ucla Anderson School of management, 2011; Zara:Fast Fashion, Pankay Ghemawat, José Luis Nueno, Harverd Business School, 2006

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